IDBI on CBI radar over Kingfisher bad loan

IDBI on CBI radar over Kingfisher bad loan

IDBI on CBI radar over Kingfisher bad loan

The CBI has registered a preliminary enquiry to probe the allegation that the IDBI Bank gave a Rs 950 crore bad loan to the crisis-ridden Kingfisher Airlines by overlooking its negative credit ratings and negative net worth.

The fresh enquiry comes days after the CBI arrested Syndicate Bank CMD S K Jain for allegedly taking a bribe of Rs 50 lakh to increase the credit limit of some companies in violation of banking rules.

Officials said the senior officials of both Kingfisher Airlines, part of the UB group promoted by Vijay Mallya, and IDBI Bank will be questioned.

They said the bank officials would be questioned to find the reasons for extending the loan to the airlines ignoring its own internal report that had warned against such a move. The bank has, so far, not been able to provide reasons for extending the loan to Kingfisher.

Investigators said there was no need for the bank to take the exposure outside the consortium when other loans were already stressed.

The agency will convert the preliminary enquiry into a regular case if investigators find evidence of wrongdoings in the matter, a senior CBI officer said. Investigators said they would probe why the bank decided to give the loan when a consortium of 17 banks had an outstanding of over Rs 7,000 crore in loans from Kingfisher with State Bank of India having the highest exposure of Rs 1,600 crore. The banks had also said that they have lost faith in the revival of the company and initiated recovery measures.

“We are aware of this particular case. In the latest notice, the CBI has sought replies to certain queries as part of ongoing investigations to which we shall reply in the next few days,” IDBI Bank Chairman and Managing Director M S Raghavan told agencies.